(08 February 2013 – Australia) National Australia Bank (NAB) posted its first-quarter profit on Thursday, revealing a drop by 20 percent largely due to lower values on some of its assets.NAB’s unaudited net profit in the three months to 31 December, was around A$1.26 billion, down from A$1.6 billion in the same period the previous year.
The bank’s unaudited cash earnings in the three months to December were about A$1.45 billion, up from A$1.4 billion in the same period the previous year.
The difference between profit and cash earnings were reported to be losses on fair value and hedging impacts, NAB said.
Cash earnings rose due to a 3 percent increase in revenue, thanks to an improved performance in wholesale banking, NAB said.
‘This is a pleasing result, especially given operating conditions remain challenging both in Australia and the UK, notwithstanding recent improvements in financial markets,’ Chief Executive Cameron Clyne said in a statement.
Restructuring of the core UK banking business was proceeding well, Clyne said on Thursday, with costs lowered and its funding mix improved.
NAB’s overall cost of bad debts was A$554 million in the three months to December, a fall of 10 percent.
But there was a rise in bad debts in its personal banking division, NAB said.
NAB’s costs also rose, by 4 percent, in the three months to December, due to wage increases and lower performance-based pay in the preceding months.
The bank’s workforce fell by about 500 in the three months to December, largely due to the UK restructure, NAB said.